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September 17, 2019

On Monday, in Mayo Foundation for Medical Education and Research v. Iancu, the Federal Circuit affirmed a decision by the U.S. District Court for the Eastern District of Virginia affirming a determination by the U.S. Patent and Trademark Office regarding the Patent Term Adjustment for U.S. Patent No. 8,981,063. In affirming the District Court, a divided panel concluded that the USPTO's interpretation of "any time consumed by continued examination of the application requested by the applicant under section 132(b)" in 35 U.S.C. § 154(b)(1)(B)(i) was correct.

The '063 patent, which relates to antibodies for treating disease conditions characterized by immunosuppression (such as cancer, AIDS, and certain congenital immune deficiencies), issued from U.S. Application No. 12/421,310. During prosecution of the '310 application, the Examiner invited Mayo to make a priority showing with respect to U.S. Patent 7,635,757, and Mayo responded by filing a Request for Continued Examination, arguing that it has priority of invention over the '757 patent, and suggesting an interference. Mayo then filed a supplemental amendment cancelling claims that the Examiner had indicated would not correspond to the count in the impending interference; some of the cancelled claims had been previously withdrawn in response to a restriction requirement, and the Examiner advised Mayo that, for the purposes of eventual PTA calculation, claims not relevant to the impending interference should be removed. The cancelled claims were pursued in a separate continuation application, which issued as U.S. Patent 8,460,927.

An interference was subsequently declared between the '310 application and the '757 patent, with the Board ultimately awarding priority to Mayo's '310 application and cancelling the claims in the '757 patent. The Board then returned the '310 application to the Examiner, who issued an Office Action rejecting the claims for non-statutory double patenting in view of the '927 patent. Mayo responded by arguing that the claims of the '310 application and '927 patent were patentably distinct, and the Examiner withdrew the rejection and mailed a Notice of Allowance.

On appeal, Mayo provided the following timeline for prosecution of the '310 application:

The appeal concerned the third bracketed time period of 194 days. After the '063 patent had issued, Mayo, dissatisfied with the USPTO's PTA determination, requested a redetermination of PTA, arguing that the Examiner's sua sponte reopening of prosecution after termination of the interference did not constitute time consumed by continued examination of the application requested by the applicant under 35 U.S.C. § 154(b)(1)(B)(i) (i.e., "RCE time"). The USPTO disagreed, asserting that the RCE time did not end when the interference was declared, but rather ended when the Notice of Allowance was mailed. Mayo requested reconsideration, the USPTO denied Mayo's request, and Mayo appealed to the Eastern District of Virginia.

Before the District Court, Mayo argued that a declaration of an interference terminates RCE time for the purposes of calculating B Delay (i.e., which entitles the applicant to PTA for each day the application is pending beyond three years). In support of its argument, Mayo asserted that Novartis AG v. Lee, 740 F.3d 593 (Fed. Cir. 2014), stood for the proposition that continued examination ends once the claims are "deemed allowable," and not necessarily on the date the Notice of Allowance is mailed, and that a declaration of interference (which requires that an application "otherwise be in condition for allowance") is tantamount to a Notice of Allowance. Mayo also asserted that the Examiner's reopening of examination after remand from the Board is time attributable to the PTO, not the applicant, because Mayo never requested examination after remand. The District Court rejected Mayo's arguments and affirmed the USPTO's PTA determination, and Mayo appealed to the Federal Circuit.

Before the Federal Circuit, Mayo argued that it never "requested" examination after the Board's remand following termination of the interference, and that under USPTO regulations, an interference cannot be declared unless at least some claims are deemed allowable but for the outcome of the interference. The USPTO countered that a declaration of an interference does not close prosecution on the merits, and that examination may continue afterward. The USPTO also argued that as a practical matter, Mayo's suggestion that the Court look to the time when the claims are deemed allowable, as opposed to the mailing of a Notice of Allowance would turn PTA calculations into a "wildly impractical" and "hotly contested factual inquiry in nearly every PTA case."

In an opinion authored by Judge Lourie and joined by Judge Dyk, with Judge Newman dissenting, the majority agreed with the USPTO, affirming the District Court's decision affirming the USPTO's PTA determination. In response to Mayo's argument that a declaration of interference is tantamount to a Notice of Allowance, the opinion notes that "[w]hile the PTO's regulations do indicate that at least one claim in an application should be in condition for allowance before an interference is declared, . . . the regulations also explicitly contemplate that the Board may recommend further action by the examiner, including issuing a rejection" (citation omitted), and therefore, "the PTO's regulations as a whole do not indicate that a declaration of an interference is tantamount to a Notice of Allowance." The majority also disagreed with Mayo's interpretation of Novartis, stating that "Mayo only gets to its conclusion by placing more weight on the term 'requested'—a word having little more than clerical significance on a fair reading of the statute—than it can reasonably bear." In particular, the opinion indicates that "[n]othing in § 132(b) implies that an RCE entitles the applicant to a special form of examination, where the claims must be allowed once the grounds of rejection presented in the Final Rejection are resolved; nor does the statute imply that continued examination is no longer requested by the applicant once the PTO issues a new ground of rejection." According to the majority, "Mayo requested continued examination, and that is what it received, both before and after the interference proceeding." The majority therefore held that "where an RCE has previously been filed, the time between termination of an interference and the date of mailing of the Notice of Allowance is 'time consumed by continued examination of the application requested by the applicant under section 132(b)' pursuant to 35 U.S.C. § 154(b)(1)(B)(i)," and affirmed the District Court.

Judge Newman, writing in dissent, contended that the majority's holding "does not comport with the statutory provisions and precedent, and is contrary to the purpose of term adjustment," adding that the post-interference examination period "plainly is examination delay due to PTO procedures." With regard to the Court's holding in Novartis, Judge Newman explained that:

Novartis held that "'examination' presumptively ends at allowance, when prosecution is closed and there is no further examination on the merits in the absence of a special reopening." . . . Novartis did not relate to ongoing or continuing prosecution or any activity before mailing of the notice of allowance. Novartis was concerned only with the "time from allowance to issuance."

According to Judge Newman, "[h]ere the post-interference examination was PTO activity, part of the examination procedure before issuance of the notice of allowance," which "plainly is within the purpose of the term adjustment statute."